As consumers living cost-conscious lifestyles, we all know how satisfying it can be to save a few bucks here and there. We take pride in our ability to sniff out just the right deal after scouring the market for a bargain. We’ll also pat ourselves on the back when we find a way not to spend money on an expense that had seemed nearly impossible to avoid.
In most cases, our commitment to living frugal lives is a good thing, but we have to be careful not to get too carried away with our money-saving addiction. That’s because there are times when our thrifty tendencies can actually end up costing us more down the road if we aren’t careful.
Here are six ways your efforts to save money might actually be costing you more than you realize.
1. Buying Low-Quality Goods
We’ve all heard the phrase “you get what you pay for.” Often times, that’s true. Of course, buying discount goods doesn’t necessarily guarantee that you’ll end up disappointed with your purchase. After all, there’s a time and place for buying low-quality goods at a discount. Sure, I’ll buy the cheap single-ply toilet paper to save a few bucks – who cares?!
Where we get into trouble is when we refuse to pay a little extra for durable, high quality products, especially when we go into those purchases knowing we want something that will work well and last a long time. Low-quality items are more likely to require repair or premature replacement. When the used washing machine we bought from that shady guy on Craigslist goes kaput, we’re right back where we started. And we end up paying twice for something we should have only bought once.
The lesson? Sometimes it’s worth it to pay a little more upfront to get a quality product or service. It can help us save money in the long run.
Here are a few examples of products that I’ll pay a little extra for to ensure they’re long-lasting and reliable:
- Select pieces of my wardrobe (I’m not talking about t-shirts. I mean stuff that serves a specific purpose like a well-tailored suit, hiking shoes, etc.)
2. Skipping Routine Maintenance
There are lots of things in our lives that require routine maintenance. Unfortunately, routine maintenance usually costs money which is one of the reasons we are determined to avoid it. The problem is, trying to save money by postponing or skipping out on routine maintenance can make a minor issue worse, costing you more in the long run.
Maybe you’re thinking you can save some money by getting your car’s oil changed less frequently. Or maybe you thought a few strips of duct tape is all you need to keep that leaky pipe under the sink in check. There’s a chance that you’ll survive both of those situations just fine. But there’s also a chance that your frugal approach to maintenance could lead to larger repair bills. And if things really get out of hand, your insurer might determine that your policy doesn’t cover repairs due to your failure to adequately maintain the property.
Routine maintenance can almost seem like a waste of money sometimes. If it ain’t broke, why fix it? But we now know that being cheap can end up costing us in the long-run. Plus, there is additional value that comes with having peace of mind of knowing that your maintenance is up to date.
Bonus: Remember, your body needs routine maintenance too! Don’t ignore your diet, exercise or regular trips to the doctor or dentist because it’s too costly or a waste of time.
3. Buying Sale Items Just Because They’re on Sale
There’s nothing like a buy-one-get-one-free deal to get people to reach for their credit cards. You didn’t need that first Snuggie® in your life, but somehow that second free Snuggie® made the deal irresistible.
Here’s my personal favorite: “I don’t know when I’ll need this, but I might as well buy it now so I’ll have it when I need it.” Soon enough you’ll have a mountain of things you’ll need someday (aka clutter). I’ll bet that for every item that eventually gets put to use, there are five more that end up lost or eventually get thrown away.
Avoid getting caught in a sale stupor by asking yourself these three questions:
#1. Do I really want this? You’re probably thinking, “Of course I want it. I just put it in my shopping cart. Duh!” But ask yourself if it’s the item that you really want, or just the satisfaction of buying that item. It’s a subtle distinction, but it makes all the difference.
#2. Do I actually need this? Yes or no? It should be an easy question. Be honest with yourself.
#3. Am I willing to pay this price? Sale stickers can be distracting. Don’t let the excitement of the clearance aisle or the sale of the season get the best of you – stop and think about the price you’re about to pay before you commit to a purchase. Yeah, those adorable socks are an incredible 75% off, but they’re still $6! Do you really want to pay $6 for a pair of socks? Nah.
4. Going Out of Your Way for a Bargain
Sometimes I’ll catch myself hemming and hawing over which dish soap is the better deal. I’ll stand in the aisle at the grocery store for three or four minutes trying to make up my mind. By the time I finally decide, I’ve probably saved ten cents. Not worth the time.
Being cost-conscious and savvy with money is great, but there comes a point where, as one of my favorite law school professors put it “the juice ain’t worth the squeeze.”
Here are a few other ways we can get carried away searching for a “bargain” and end up wasting time and money:
- Standing in long lines for free or discounted stuff (especially when we don’t really want or need that stuff)
- Spending time and money on gas driving to different stores as we stubbornly search for a slightly better deal.
- Coupon clipping craze (just because something is on sale doesn’t mean it’s a good price or that you can’t find a better deal elsewhere)
5. DIY Projects Gone Wrong
There’s nothing like a good DIY project to challenge yourself, learn something new, and save some money. But there are some projects that you’re better off leaving to a professional. Trying to tackle projects without sufficient experience or expertise can lead to costly mistakes. If you aren’t sure whether you can handle the project but you know that you could face potentially expensive consequences if you make a mistake, then hire a professional to help.
Here are a few examples of situations where trying to save a few bucks by doing it yourself can end up costing you if you don’t know what you’re doing:
- Filing your own taxes when they are complicated (aka,trying to play CPA)
- Handling your own legal matters (aka, trying to play lawyer)
- Making complex repairs to an automobile (aka, trying to play mechanic)
- Taking on major remodeling projects or making repairs around the house (aka, trying to play contractor)
6. Buying in Bulk
We get lured into buying in bulk just like we become tempted to impulsively purchase sale items. We just can’t resist! At a glance, there appears to be considerable value in buying bulk. And often, that is the case. But, like any other purchase, that surplus value goes to waste if we buy things we don’t need or can’t use.
I’ll bet that most of us recognize that pitfall when we buy in bulk and we’ll go to great lengths to avoid letting anything go to waste. In fact, our seemingly endless supply of pudding and paper towels might even inspire us to start acting a little differently. Suddenly, we’re consuming unhealthy amounts of pudding because we don’t want it to go to waste and we’re using twice as many paper towels as usual because there’s plenty more where that came from.
What Did I Miss?
I just rattled off six common ways we can end up spending more despite trying to spend less, but I’m sure there are lots of other ways I didn’t mention. Let us know in the comments if you can think of other ways our brains trick us into think we’re saving money when we really aren’t.